Reducing emissions while increasing revenue can be tricky – but carbon credits could give some companies an edge

Photo credit: Gary Chan on Unsplash

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World leaders gathered in Glasgow, Scotland, late last year to discuss international agreements on climate change at the United Nations Climate Change Conference (COP26).

One of the main objectives of COP26 was to establish international rules for a global carbon credit market. Some progress has been made in this area with the creation of a market where countries can trade carbon credits.

However, a great deal of uncertainty remains as to how this may work at the level of an individual company. An organic waste company says it continues to focus on its own voluntary carbon credit scheme, reducing environmental pressure and making money at the same time.

Sus Global Energy Corp. SNRG said on May 24 when releasing its first quarter results that it plans to monetize its recently implemented carbon credit program in the second quarter of 2022.

The Toronto-based company, which processes municipal organic waste and produces regenerative products such as organic fertilizer from that waste, signed an agreement in November with Bluesource Canada ULC to develop and market greenhouse gas credits from its main location in Belleville, Ontario. Bluesource advises organizations across North America on their climate and environmental goals.

How it works?

Landfills are among the biggest emitters of greenhouse gases. By diverting organic waste from landfills and instead treating it at its facilities, SusGlobal reports that it both reduces emissions and produces regenerative products such as premium fertilizers that can be found at major retailers. such as Home Depot Inc. HD.

Bluesource audits the tonnage of waste processed to determine the number of carbon credits SusGlobal should receive. From there, the company sells its credits to large emitters who must offset their own carbon footprint.

It is a model that has been commonly used by other companies such as electric vehicle producers Tesla Inc. TSLA.

Eventually, SusGlobal’s revenue from carbon credits will be dwarfed by the amount of revenue from the waste it treats, as increasing regulations determine less frequent use of landfills, said SusGlobal CEO Marc Hazout.

“It’s a win-win situation for SNRG, whose model has always been to divert organic waste from landfills and then produce regenerative products as part of our circular economy model,” he said. declared.

For now, the carbon credit incentive system is voluntary, but governments around the world, as the COP26 frameworks show, are leaning towards legislation that would require zero emissions and thus increase the value of carbon credits, Hazout noted.

“Eventually we will move towards a mandatory market, and these are the markets that were discussed at COP26,” Hazout said.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.